Auction of Broadcast Airwaves Goes Ahead

The Obama administration plans to push ahead with a controversial auction of broadcast airwaves as part of a plan to cover the country with high-speed Internet connections. However, the $39 billion planned merger between AT&T and T-Mobile could disrupt that plan, The Washington Post reports.

In order to carry out the high-speed Internet plan, the administration hopes to raise nearly $28 billion from the sale of broadcast channels that would then be converted to wireless networks for smart phones and other devices to connect to the Internet. A letter signed by 100 economists argues that the sale would also “increase social welfare,” the Post said.

However, Stifel Nicolaus analyst Rebecca Arbogast said, “If these two companies can satisfy much of their spectrum needs by joining forces, it would reduce some of the demand for new spectrum and possibly lower auction revenue estimates.”

The money from the auction would go to broadcasters who give up spectrum, pay for an emergency public safety network, and expand wireless in rural areas, the Post reported.

AT&T supports the president’s plan for auctions. Spokesman Michael Balmoris said the “spectrum crisis is real and could impact investment and jobs if Congress doesn’t act quickly,” the Post said. An administration official said it could be as long as three years before an auction occurs.